Abstract
This chapter discusses the use of tourist taxes as strategic tools of local sustainable development. It uses recent literature (2020-2026) and case studies around the globe to demonstrate how well-designed taxes correct externalities of tourism, generate non-resident revenue, environmental conservation, and cultural heritage. The chapter, underlying conceptual and theoretical framework is based on benefit-based taxation, Pigouvian correction of externality, fiscal decentralization, and local public goods. It subsequently examines typologies and design options, legal and fiscal frameworks that constitute the authority of subnational levels. The sections on empirical study the effects of the climate, stakeholders' involvement, distributional equity, and economic impacts on competitiveness and resilience. Based on the example of the European cities of overtourism, island and coastal resorts, the chapter suggests the principles of design and policy recommendations in applying the idea of tourist taxes as the part of the general regenerative and sustainable urban development policies.